Before we get around to tackling the minimum wage question in the Philippines…

I think the fundamental issue surrounding the labor market in the Philippines must be determined first.

At present, the Philippines seemingly has more supply of labor than demand. And yet not all that labor is qualified for all the particular types of expertise required. So if you’ve got an excess of supply of something, the price of it, as market dynamics would dictate, will go down. Which is why companies can afford to pay workers here pittances for certain jobs.

What to do? Decrease your supply, increase your demand for the particular types of labor that are in excess, or increase quality of available supply. Which one SHOULD have been done, or easier to do, given the current state in the Philippines?

From there, issues such as opening of the economy, investment in manufacturing and technology sectors, among others, will be raised. Then inevitably come the issues of adequate infrastructure, expensive utility costs, and sustainable business practices.

Whether the Philippines is willing to and up to the task to face these questions is another matter entirely.


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